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Abstract
Since its inception as a semi-autonomous state in 2005, the South Sudanese government procurement sector has been a booming business. Funded by oil income, the government procurement regimes have become instrumental institutional mechanisms for the allocation of rents within the political marketplace. This type of ‘rentier' politics is often considered to be anti-developmental in mainstream thinking about statebuilding in fragile states, while others argue that rentierism is not growth-retarding per se, but that its impact on development depends on how rents are utilized and reinvested. Taking the latter less-normative approach to rentierism as a starting point, this article begins by identifying patterns of rent allocation that characterized the government procurement sector during the 2005–2011 interim period. Following the political decision to shut down oil production in early 2012, the rent process that had sustained these clientelistic arrangements became suddenly unsustainable. In this context, another cadre of entrepreneurs comprised largely of diaspora returnees with higher technological capabilities and transnational linkages started to gain ground within the government procurement sector, signifying the emergence of a potentially ‘developmental' feature in the rent process. Notwithstanding, while the 2012–2013 austerity period arguably precipitated certain developmental features, it also uprooted the political settlement, which culminated in the December 2013 crisis, pushing the young country back to civil war.
Acknowledgements
The author would like to thank Timm Sureau and Dr Katrin Seidel from the Max Planck Institute for Social Anthropology, Halle S./Germany, for organizing the workshop ‘Emerging South Sudan: Negotiating Statehood', where this paper was first presented, his two PhD thesis supervisors, Prof. Dorothea Hilhorst and Dr Kristof Titeca, and the anonymous peer reviewers for their extensive feedback.
Disclosure statement
No potential conflict of interest was reported by the author.
Notes
1. Interview with a South Sudanese contracting entrepreneur conducted in Juba, October 2012.
2. Di John, “Mineral Resource Abundance and Violent Political Conflict”; Mcgillivray, “Aid Allocation and Fragile States”; Collier, “The Political Economy of Fragile States.”
3. Christoplos and Hilhorst, “Human Security and Capacity in Fragile States.”
4. Raeymaekers, “The Power of Protection”; Titeca “Tycoons and Contraband.”
5. Economic rent is usually defined in the literature as an income from any factor of production (land, labour, or capital) in excess of the amount required to draw it into its current use (that is, its opportunity cost) (Booth, “Development as a Collective Action Problem,” vi).
6. Zenawi, “States and Markets.”
7. Kelsall, “Neo-Patrimonialism, Rent-Seeking and Development,” 677; Chabal and Daloz, “Africa Works”; Khan, “Political Settlements and the Governance of Growth-Enhancing Institutions.”
8. Khan, “Political Settlements and the Governance of Growth-Enhancing Institutions;” Kelsall et al., “Developmental Patrimonialism?”; Moore and Schmitz, “Idealism, Realism and the Investment Climate in Developing Countries”; Golooba-Mutebi “Politics, Political Settlements and Social Change;” Blunt, Turner, and Lindroth, “Patronage's Progress in Post-Soeharto Indonesia.”
9. Di John and Putzel “Political Settlements,” 4.
10. Ibid., 15.
12. Welch, “Nation-State, Diaspora and Comparative Education,” 297.
13. “Tendrepreneur”: a phrase allegedly coined by the South African Communist Party leader Blade Nzimande in his December 2009 report to the party's special congress in Limpopo.
14. The phrase “gatekeepers” in this context was taken from an interview conducted with a senior figure in the Aweil (Northern Bahr El Ghazel) business community in Aweil town, March 2011.
15. Secondary data collection continued up to the time of writing in February 2014. In addition, a limited number of ± 10 VOIP interviews with key informants were conducted after the 15 December 2013 crisis.
16. The research framework adhered to an ethics policy of anonymizing all research informants, audio-recorded informed consent for the use of interview material, and secure data storage. No primary data was shared with a third party and research informants maintained the right to withdraw or review their statements throughout the duration of the fieldwork.
17. Research participants included national and state government officials within ministries of finance and various procurement departments (N = 18), organizers and staff members from five different business associations, including the national Chamber of Commerce and its State branches in Torit, Bor and Malakal (N = 10), and a diverse group of traders and medium to large-sized business owners (N = ± 60), of whom roughly half would classify as “reaspora entrepreneurs”, i.e. returnee diaspora who are actively involved in South Sudan's medium to large-sized enterprise segment. A select dozen reaspora entrepreneurs were interviewed more frequently and followed closely throughout the duration of the research.
18. De Waal, “Sizzling South Sudan.”
19. Selassie, “Non-Oil Revenue Study of Souther Sudan”; Benson, “South Sudan: Making Tax Work.”
20. Johnson, “The Root Causes of Sudan's Civil Wars”; Branch and Mampilly, “Winning the War, but Losing the Peace?”
21. De Waal, “Mission without End?”
22. Twijnstra and Titeca, “Everything Changes to Remain the Same?”
23. Kelsall et al., “Developmental Patrimonialism?”
24. Booth and Golooba-Mutebi “Developmental Patrimonialism?”
25. Some scholars have pointed out that in the case of Rwanda, on which much of the evidence for African developmental patrimonialism rests, this reasoning is not entirely valid as Rwanda's large companies controlled by the ruling elite have become increasingly reliant on the state's scarce fiscal resources, thereby compromising the state's ability to manage rents in a manner that would enhance growth and productivity (Gökgür, “Rwanda's Ruling Party-Owned Enterprises,” 33).
26. Kelsall et al., “Developmental Patrimonialism?,” 3.
27. Di John and Putzel “Political Settlements,” 18.
28. Khan “Political Settlements and the Governance of Growth-Enhancing Institutions,” 70.
29. Ibid, 28.
30. Leopold, “Inside West Nile”; Walraet, “Governance, Violence and the Struggle for Economic Regulation in South Sudan.”
31. Manger, “Trade and Traders in the Sudan.”
32. Johnson, “Political Ecology in the Upper Nile;” MacGaffey, “The Real Economy of Zaire;” Tosh, “The Economy of the Southern Sudan under the British.”
33. Johnson, “The Root Causes of Sudan's Civil Wars;” Patey, “Crude Days Ahead?”
34. See CPA, Ch. III Naivasha Protocol 5.6.
35. The CPA grants 50% of revenue from producing Southern oil wells to the GOSS, after contributions to an Oil Revenue Stabilization Account and oil-producing states. (Patey, “Crude Days Ahead?” 626).
36. Global Witness, “Crude Calculations.”
37. See also: Schomerus and Titeca, “Deals and Dealings.”
38. Exact figures are very difficult to ascertain as no records were kept. The figure of 90% is taken from a Sudan Tribune news article published on 11 June 2013, see http://www.sudantribune.com/spip.php?article46896.
40. Equivalent to the estimated 500m Sudanese pounds, see: http://www.sudantribune.com/spip.php?article46189.
42. Based on interviews with traders who were actively supplying the government with dura in 2008 and 2009.
43. Ajak, “In Defence of the Central Bank's Devaluation Decision.”
44. Ibid.
46. This explanation coincides with the phrase from President Salva Kiir Mayardit's US$4 billion letter that will be discussed later in this article, where he noted that “Most of these funds have been taken out of the country and deposited in foreign accounts. Some have purchased properties, often paid in cash.” (2012).
47. SSCCAI, or in short Chamber of Commerce, in Arabic “el Ghurfa el Tijariya.”
48. Based on interviews conducted in Juba between 2010 and 2013 and on official Chamber of Commerce correspondence with the Presidency in 2010 (see: http://paanluelwel2011.files.wordpress.com/2013/01/rss-grain.pdf).
50. De Waal, “Mission without End?” 103.
51. A term used to describe a group of around 20,000 young boys of mostly Dinka and Nuer dissent who were displaced during the conflict and ended up in refugee camps in Ethiopia and Kenya. Around 600 were sent to Cuba in government-sponsored collaboration with the SPLA in 1986 (Berger, “From Cattle Camp to Slaughterhouse”).
52. Based on >30 interviews conducted between 2010 and 2013 among members of the Chamber of Commerce who voted in the 2010 chairman election for the Chamber of Commerce.
53. Based on interviews conducted in Wanjok, Aweil-East County between December 2011 and March 2012.
54. K. Titeca, forthcoming.
55. Garang, “The Question of Big Government, and Financial Viability,” 4.
56. Branch and Mampilly, “Winning the War, but Losing the Peace?”
57. Linden, et al., “The Contribution of the Diaspora to the Reconstruction of Education in South Sudan”.
58. Brinkerhoff, “Creating an Enabling Environment for Diasporas’ Participation in Homeland Development”; Dahles, “Return Migration as an Engine of Social Change?” Turner “Three Discourses on Diasporas and Peacebuilding.”
59. Based on 20 different interviews with (former) reaspora civil servants, conducted between 2010 and 2012.
60. Interview conducted in Kampala, June 2011.
61. Interview conducted in Juba, November 2010.
62. Interview conducted in Juba, February 2012.
63. Ibid.
64. Interview conducted in Juba, November 2012.
65. Interview conducted in Juba, November 2010.
66. The second segment of this quote is from the same informant, but from a different interview conducted in Juba, April 2012.
67. Global Witness, “Blueprint for Prosperity”.
68. Khartoum demanded a transit fee as high as US$36 per barrel while Juba was not prepared to pay more than US$1. See: http://www.reuters.com/article/2012/02/24/us-southsudan-idUSTRE81N1U220120224.
69. See Global Witness, “Blueprint for Prosperity,” or http://www.worldbank.org/en/country/southsudan/overview.
70. For an overview of these taxation reforms and their consequences, please refer to Twijnstra and Titeca, “Everything Changes to Remain the Same?”
71. Taken from a directive sent to all procurement officers signed by the undersecretary at the Ministry of Commerce and Industry in March 2012; similar directives were sent to procurement offices in the MoFEP and the Ministry of Transport, Roads and Bridges.
72. Based on interviews with National and State procurement officials in 2012.
73. Interview conducted in Juba, June 2012.
74. Interview conducted in Juba, November 2012.
75. Ajak, “In Defence of the Central Bank's Devaluation Decision.”
76. Interview conducted in Juba, August 2013.
77. Interview conducted in Juba, September 2013.
78. “South Sudan denies austerity measures have cut salaries” http://www.sudantribune.com/spip.php?article44334.
79. Interview conducted in Juba, March 2012.
80. Excerpt from H. E. Salva Kiir's letter from 3 May 2012, (see: http://www.channel4.com/media/c4-news/pdf/presidentletter.pdf).
81. De Waal, “Mission without End?”
82. Another example of this is the suspension of finance minister Kosti Manibe Ngai over alleged charges of corruption regarding the procurement of anti-fire safes in Jube 2013. See: “My suspension politically motivated, says finance minister” (see http://www.sudantribune.com/spip.php?article47074).
83. Interview conducted in Juba, August 2012.
84. Interview conducted in Juba, June 2012.
85. See “South Sudan president fires cabinet Armed troops guard government buildings day after Kiir sacks vice president and cabinet in ‘reshuffle’.” http://www.aljazeera.com/news/africa/2013/07/201372318388499663.html.
86. Interview conducted in Juba, October 2012.
87. Note that the narrative justifying many of the austerity measures themselves was often based on the ideological rhetoric of shutting down oil production in defiance of Khartoum. See Twijnstra and Titeca 2015 (forthcoming).
88. Interview conducted in Juba, November 2012.
89. Khan, “Political Settlements and the Governance of Growth-Enhancing Institutions,” 28.
90. Ibid.; Khan, “Markets, States and Democracy;” Kelsall et al., “Developmental Patrimonialism?;” Di John and Putzel, “Political Settlements.”
91. Garang, “The Question of Big Government, and Financial Viability”; De Waal, “Mission without End?”
92. Lund, “Struggles for Land and Political Power,” 2.
93. Twijnstra and Titeca, “Everything Changes to Remain the Same?”
94. It must be noted that many of these rents were allocated in the form of arrears that have to date still not been paid.
95. De Waal, “Mission without End?”